Lock out or strike predicted for Met Opera players

Union contracts expire on July 31, and so far negotiations are stalled with labor and management far apart.

With 15 labor contracts set to expire on July 31, the acrimony between The Metropolitan Opera and its unions continues to grow. Two of the three largest unions are refusing to move forward with negotiations until they receive more data from the Met that they say is necessary for a substantive dialogue. Many predict a strike or a lockout which could have long-ranging consequences. A lockout in 1980 delayed the opening of Met's opening by four months, costing it significant revenue that added to its challenges.

In the most recent development, the Met filed an unfair labor practice charge with the National Labor Relations Board last week against one of the two unions, the American Guild of Musical Artists. It said the AMGA's refusal to hold negotiations at the opera's headquarters would frustrate the entire bargaining process.

Faced with a sharp attendance decline and noting that two-thirds of its $327 million in annual operating costs are spent compensating union members, the Met is asking the unions to accept changes in work rules and benefits that would save it 16% or 17% a year. It pledged administrative staff would take similar cuts. In the fiscal year ended July 31, 2013, the Met ran a $2.8 million deficit but the opera's general manager Peter Gelb said it would have been larger if he didn't solicit large donations from board members. He took a 10% pay cut in April, lowering his base salary to $1.4 million a year, and has pledged to further reduce his pay by the same amount as the union cuts.

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However, the unions contend the proposed changes would lower their compensation by much higher amounts. The orchestra union said members' earnings would fall between 25% and 38%. Additionally, union representatives said the dwindling audiences and weak finances largely stem from Mr. Gelb's bad management, heavy spending on new productions and poor artistic vision.

Mr. Gelb said the unions are trying to avoid serious discussions about improving the opera's finances. He said that if the unions accept cuts, the board has agreed to fundraise to increase the Met's endowment so it can generate more returns that can be used for operating expenses. The endowment at the end of fiscal 2012, which ended on July 31, was about $236 million.

Mr. Gelb said he is open to hearing their proposals.

"They know we would accept something less than 16%. They just don't like the idea of any pay cut at all," said Mr. Gelb, who has lead the Met since 2006. "It would be a shame if the Met went out of business so I'm attempting to recalibrate the finances of the institution into a sustainable business model."

That can't happen if the two sides aren't talking. On June 25, the Met filed the charge against the AGMA, which represents a total of about 850 chorus members, dancers, principal singers, and production personnel, accusing it of failing to bargain in good faith. The Met said all the simultaneous expirations means it must conduct multiple bargaining sessions with different unions during the last week in July, along with rehearsals, making it impossible to meet with different unions in different locations.

Alan Gordon, executive director of the AGMA, said the Met is a hostile environment for the union, in part because it controls who enters the building. He also ruled out the Met's lawyers' office because of the building's requirement that visitors be photographed. The Met filed another unfair labor practice against AGMA in April when the union tried to bring journalists into a negotiating session. It was eventually dropped.

"The charge is beyond stupid," said Mr. Gordon. "It is foolish and time wasting, and only makes more money for their lawyers."

Since the charge, Mr. Gordon has requested more information from the Met including contacts for its board members, more detail on Mr. Gelb's compensation and whether Mr. Gelb has had serious conversations with lawyers and his board about bankruptcy. Mr. Gelb has raised the issue of bankruptcy publicly in the past—remarks Mr. Gordon alleges are scare tactics. Mr. Gelb counters that if costs aren't brought under control the Met could face a scenario in a few years that could include bankruptcy.

AGMA isn't the only union refusing to go the table.

The Associated Musicians of Greater New York, Local 802, the orchestra union, is also refusing to enter any more bargaining sessions with the Met until it receives more information such as a detailed business plan to fix the Met's problems. Last month, it issued a report that said the cost of new productions has increased 220% over the five years ended July 31, 2013. Yet, it added that the Met's box office numbers show a definitive drop in attendance at revivals of Gelb productions, and that the drop was "evidence of a failed artistic vision." It also said the lack of return on investment in new productions points to "failed financial stewardship."

In the year ended July 31, 2012, only 79% of the Met's 3,800 sits were sold, down from 91% five years earlier. Box office revenue—the Met's largest source of earned income—fell 4% to $89.3 million in the same time period.

The report from the orchestra's union offered numerous examples of the poor box office performance of some of Mr. Gelb's productions, which were countered by positive ones from the Met. Overall, the Wall Street Journal found his productions had a mixed record.

Union members say they are being asked to make an investment in the Met's future, and would be willing to work with management for solutions. However, they want enough information to make appropriate decisions.

"He says he wants to create a sustainable business model so show us what it is. What is the ideal percentage for labor costs? How will you engage new audiences?" asked Weston Sprott, a trombone player. "He wants us to trust his vision but it is a hard sell."

Mr. Gelb said the Met has been "besieged" with information requests from unions, and is addressing them as quickly as possible. He added that opera companies can't survive without staging new works, but finding the gems is a matter of trial and error.

"Not everything works," he said. For now, he would put the negotiations in the not working column. Yet, he remains hopeful there could be a deal before the deadline though he adds, "It wouldn't happen til the last moment."